The Ministry of Trade, Industry and Energy announced that the 15th round of follow-up negotiations for the Korea-China FTA on services and investment will take place from June 22 to 26 in Beijing. The negotiations will be led by Kwon Hye-jin, head of the ministry's trade negotiation office, and Lin Feng, director of the International Trade Department of the Ministry of Commerce of China, with around 30 representatives from both sides participating.
The Korea-China FTA, which took effect in 2015, primarily focused on the liberalization of goods trade. In March 2018, both countries began follow-up negotiations to enhance the level of liberalization in services and investment, resulting in 14 rounds of official talks and interim meetings. However, significant differences in positions regarding the scope of service market opening and investment regulations have hindered substantial progress in the negotiations.
In January, the leaders of both countries agreed to work towards meaningful progress in the follow-up negotiations within the year. Discussions continued during the Korea-China Ministerial Meeting held in March. The Ministry plans to discuss ways to advance the negotiations during a separate meeting between trade ministers at the upcoming joint committee of the Korea-China FTA this week.
The core objective of the current negotiations is to shift the focus of Korea-China economic cooperation from goods trade to services, investment, and finance. Historically, South Korean companies have concentrated on manufacturing and intermediate goods exports to China. However, as the Chinese domestic market evolves and digital transformation accelerates, there is a growing demand for institutional access in sectors such as content, distribution, finance, and professional services.
The negotiation teams aim to achieve substantive outcomes in agreement texts and market opening discussions across the three areas of services, investment, and finance. The government is committed to creating a free and open trading environment for services and a predictable investment climate to facilitate South Korean companies' entry into the Chinese market.
While the services and investment negotiations may not be as visible as tariff reductions, they have a direct impact on business activities. Improvements in market entry restrictions for foreign companies, licensing procedures, equity limitations, the scope of financial services, and investor protection regulations could enhance the predictability of local operations for South Korean firms.
Recently, trade between South Korea and China has become increasingly dependent on certain items like semiconductors, while securing new growth drivers in consumer goods and services has emerged as a challenge. Progress in the follow-up negotiations could complement the goods-centered Korea-China FTA and broaden the foundation for economic cooperation between the two countries.
Kwon Hye-jin stated, "I hope the follow-up negotiations for the Korea-China FTA will lay the groundwork for improving free and open trade in services and a predictable investment environment. We will do our best to achieve negotiation outcomes that will assist our companies in entering the Chinese market."
* This article has been translated by AI.
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